ILOMATAILOMATA

Ilomata International Journal of Tax and AccountingIlomata International Journal of Tax and Accounting

This study investigates the impact of credit risk management on the financial performance of commercial banks in Nigeria. It aims to assess how key credit risk indicators—capital adequacy ratio (CAR), cost-to-income ratio (CIR), and non-performing loans (NPL)—influence bank profitability. The study employs a panel regression model, utilizing secondary financial data from commercial banks operating between 2010 and 2022, sourced from the Central Bank of Nigeria and other official records. Descriptive analysis, normality tests, correlation analysis, and panel regression techniques are applied to examine the relationships between variables. The results reveal a strong negative correlation between CAR and CIR, indicating that higher capital adequacy is associated with improved financial efficiency. However, regression analysis shows no statistically significant relationship between credit risk management variables and financial performance, as reflected in return on equity (ROE) and return on assets (ROA). This suggests that while credit risk management practices affect cost efficiency, their direct impact on profitability remains inconclusive. The findings highlight the complexity of credit risk management in commercial banking. While maintaining adequate capital buffers contributes to cost efficiency, other external economic factors may be more significant in determining profitability. The study underscores the need for commercial banks to refine their risk assessment and mitigation strategies to enhance financial stability and performance. Despite credit risk managements theoretical significance, its direct influence on financial performance appears limited. Banks should implement more effective risk assessment frameworks and recovery mechanisms for non-performing loans to optimize financial outcomes. This study contributes to the limited empirical research on credit risk management in Nigeria by providing a comprehensive panel data analysis. Unlike previous studies, it examines correlations and regression effects, revealing that credit risk management practices influence cost efficiency more than profitability.

The study found significant correlations between credit risk management practices and financial performance.A strong negative correlation existed between the capital adequacy and cost-to-income ratios, suggesting higher capital adequacy is linked to improved financial efficiency.However, the panel regression modeling revealed no statistically significant relationship between credit risk management practices and financial performance, indicating that the identified practices do not significantly affect banks financial performance.

Further research should explore the impact of credit risk management on the financial performance of insurance firms in Nigeria, given the limited existing research in this area. Additionally, studies could investigate the effectiveness of different risk assessment frameworks and recovery mechanisms for non-performing loans in enhancing financial outcomes for Nigerian banks. Finally, research could focus on identifying the external economic factors that significantly influence bank profitability in Nigeria, complementing the understanding of internal credit risk management practices. These investigations should consider the unique characteristics of the Nigerian financial landscape and aim to provide actionable insights for policymakers and banking professionals, ultimately contributing to a more stable and efficient financial system. A comprehensive analysis of these factors, utilizing advanced econometric techniques and incorporating qualitative data from bank executives, would provide a more nuanced understanding of the complex interplay between credit risk management, external economic conditions, and bank profitability in Nigeria. This research should also consider the role of regulatory policies and their impact on banks risk management strategies and financial performance.

  1. Credit risk in banks’ exposures to non‐financial firms - Accornero - 2018 - European... onlinelibrary.wiley.com/doi/abs/10.1111/eufm.12138Credit risk in banksyAAAo exposures to nonyAAAafinancial firms Accornero 2018 European onlinelibrary wiley doi abs 10 1111 eufm 12138
  2. THE EVALUATION OF CREDIT MANAGEMENT ON THE PERFORMANCE OF SMALL-SCALE ENTERPRISES IN NIGERIA - IJASOS-... ijasos.ocerintjournals.org/en/pub/article/417706THE EVALUATION OF CREDIT MANAGEMENT ON THE PERFORMANCE OF SMALL SCALE ENTERPRISES IN NIGERIA IJASOS ijasos ocerintjournals en pub article 417706
  3. AJBMR • Doi Publications. ajbmr doi publications home contact us prefix issn aims objectives... ajbmr.com/doi.nswr.10.52283/143AJBMRAAADoi Publications ajbmr doi publications home contact us prefix issn aims objectives ajbmr doi nswr 10 52283 143
  4. A Study of Multicollinearity Detection and Rectification under Missing Values | Turkish Journal of Computer... turcomat.org/index.php/turkbilmat/article/view/1880A Study of Multicollinearity Detection and Rectification under Missing Values Turkish Journal of Computer turcomat index php turkbilmat article view 1880
  5. Credit Risk and Financial Performance of Quoted Commercial Banks in Nigeria · Articles ·... aksujacog.org.ng/articles/22/11/credit-risk-and-financial-performance-of-quoted-commercial-banks-in-nigeriaCredit Risk and Financial Performance of Quoted Commercial Banks in Nigeria A Articles A aksujacog ng articles 22 11 credit risk and financial performance of quoted commercial banks in nigeria
Read online
File size324.85 KB
Pages14
DMCAReport

Related /

JURIS Challenges and Strategies of Elementary School Teachers in Planning Character Education Based on Local Culture 2026More at 2026

STAIAT TAHDZIBSTAIAT TAHDZIB Strategi adaptif seperti proyek kolaboratif cerita rakyat, kerja sama dengan tokoh tradisional, dan penilaian portofolio berhasil mengatasi tantangan‑tantanganStrategi adaptif seperti proyek kolaboratif cerita rakyat, kerja sama dengan tokoh tradisional, dan penilaian portofolio berhasil mengatasi tantangan‑tantangan

JURIS The Effect of Motivation and Supervision on the Performance of Parking Attendants in Kota Juang District 2026More at 2026

STMIKIBASTMIKIBA Penelitian ini bertujuan untuk menganalisis pengaruh motivasi dan supervisi terhadap kinerja petugas parkir di Kecamatan Kota Juang, Kabupaten Bireuen.Penelitian ini bertujuan untuk menganalisis pengaruh motivasi dan supervisi terhadap kinerja petugas parkir di Kecamatan Kota Juang, Kabupaten Bireuen.

JURIS Spatial Information on the Relationship Between IOD and Total Column Water Vapor in Cloud Formation in the Western Waters of Aceh in 2022 2026More at 2026

STMIKIBASTMIKIBA Sementara itu, pada tanggal 26 September 2022, nilai TCWV dan intensitas pembentukan awan cenderung lebih rendah, sehingga tidak ditemukan potensi hujanSementara itu, pada tanggal 26 September 2022, nilai TCWV dan intensitas pembentukan awan cenderung lebih rendah, sehingga tidak ditemukan potensi hujan

JURIS Spiritual Values of Prayer in Al Ghazali s Thought and Their Relevance to Contemporary Spiritual and Psychological Life 2026More at 2026

STMIKIBASTMIKIBA Meskipun telah banyak penelitian tentang pemikiran Al-Ghazali, penelitian sistematis yang mengintegrasikan kerangka spiritualnya dengan konstruk psikologisMeskipun telah banyak penelitian tentang pemikiran Al-Ghazali, penelitian sistematis yang mengintegrasikan kerangka spiritualnya dengan konstruk psikologis

JURIS The Role of Cost Accounting Information in Enhancing Firm Value and Stakeholder Responsibility Evidence from Indonesia s Cement Industry 2025More at 2025

IAIN PONOROGOIAIN PONOROGO Penelitian ini menyimpulkan bahwa informasi akuntansi biaya, khususnya dalam proyeksi biaya produksi, secara signifikan memengaruhi nilai perusahaan. PeningkatanPenelitian ini menyimpulkan bahwa informasi akuntansi biaya, khususnya dalam proyeksi biaya produksi, secara signifikan memengaruhi nilai perusahaan. Peningkatan

JURIS Marketing Communication Strategy for Gold Installment Products to Increase the Number of Customers at Bank Syariah 2025More at 2025

IAIN PONOROGOIAIN PONOROGO The research method used is qualitative, with data collection through in-depth interviews, observations, and document review. The study results show thatThe research method used is qualitative, with data collection through in-depth interviews, observations, and document review. The study results show that

JURIS Value Based Intermediation in Islamic Finance in Malaysia An Overview on Strategy Issues and Challenges 2025More at 2025

IAIN PONOROGOIAIN PONOROGO The research uses qualitative methods, mainly by analysing documents such as the VBI strategy paper and other related guidelines issued by BNM. The studyThe research uses qualitative methods, mainly by analysing documents such as the VBI strategy paper and other related guidelines issued by BNM. The study

JURIS Studi Minat Beli Kembali Lipstik Hanasui Peran Brand Image dan Kelompok Referensi 2025More at 2025

UNISBARUNISBAR Teknik analisis data yang digunakan meliputi regresi linear berganda, uji asumsi klasik, pengujian hipotesis (t-test dan F-test), dan analisis koefisienTeknik analisis data yang digunakan meliputi regresi linear berganda, uji asumsi klasik, pengujian hipotesis (t-test dan F-test), dan analisis koefisien

Useful /

JURIS The Influence Of Pedagogical Competency and Competency Professional Impact On Teacher Performance 2026More at 2026

ADPEBIADPEBI The analysis included instrument validity and reliability tests, classical assumption tests, and multiple linear regression using SPSS. The results showThe analysis included instrument validity and reliability tests, classical assumption tests, and multiple linear regression using SPSS. The results show

JURIS Analisis Faktor Faktor Yang Mempengaruhi Ketimpangan Pendapatan Analysis of Factors Influencing Income Inequality 2025More at 2025

UNISBARUNISBAR Pengolahan data dilakukan dengan menggunakan EViews 12. Temuan penelitian mengungkapkan bahwa variabel pertumbuhan ekonomi dan tingkat pengangguran menunjukkanPengolahan data dilakukan dengan menggunakan EViews 12. Temuan penelitian mengungkapkan bahwa variabel pertumbuhan ekonomi dan tingkat pengangguran menunjukkan

JURIS Character Education For Contemporary Urban Muslim Students A Comparative Study At Uii And Umy Student Islamic Boarding Schools 2025More at 2025

METROMETRO These findings highlight the importance of adaptive, value-driven, and community-supported models for fostering students who are both academically proficientThese findings highlight the importance of adaptive, value-driven, and community-supported models for fostering students who are both academically proficient

JURIS Pesantren Women Community s Response to The Indonesian Ulema Council MUI Fatwa on Palestine A Portrait of Urban Muslim Religious Life in Metro City 2025More at 2025

METROMETRO Penelitian ini berfokus pada Jamiyyah Perempuan Pengasuh Pesantren dan Muballighah (JP3M) di Metro City, dengan menggunakan pendekatan kualitatif fenomenologisPenelitian ini berfokus pada Jamiyyah Perempuan Pengasuh Pesantren dan Muballighah (JP3M) di Metro City, dengan menggunakan pendekatan kualitatif fenomenologis

ads-block-test